Congress Takes Up Online Sales Tax

head_dunce writes "A bill introduced Thursday by a bipartisan group of U.S. lawmakers seeks to make it easier for states to collect sales taxes stemming from online purchases. Amazon is among the e-retailers supporting the proposal, while a lobbying group representing eBay and Overstock.com stands opposed. From the article: '"Small businesses and states alike are suffering from the inability to collect due -- not new -- taxes from purchases made online," said Rep. Steve Womack, R-Ark., adding the legislation is a "bipartisan, bicameral, common-sense solution that promotes states' rights and levels the playing field for our Main Street businesses."'"

Re:Capitalism

[oh_my_080980980]

Are you in 3rd grade? The point is that small businesses suffer because customer will go to on-line retailers that don't charge state sales tax. The way State tax laws are written, the consumer is suppose to pay state sales tax from their state - they call it a use tax now. So even though you live in one state and purchase from an on-line retailer that resides in another state, you are still suppose to pay your state's sales tax.

Re:Amazon's strategy

[pollarda]

You are close ... Amazon's strategy is much more simple. When Amazon was just an online retailer with distribution centers in several states, it fought for no sales tax as it would (obviously) help Amazon's sales. The only places where Amazon had problems was in the few states where it had its distribution centers. Amazon's strategy NOW is to go beyond being a simple online sales organization to your daily sales store. Amazon is currently in the process of setting up local _same_ _day_ delivery. You will be able to place your order on Amazon for everything from books to groceries and in a great many cases, Amazon will deliver to your doorstep that same day. Amazon's already been doing this to a limited degree in Seattle and a few other locations. In order for Amazon to do this, they will have to have distribution centers in or near every major city which would in most cases require them to have to collect sales tax. Amazon doesn't want to be in a position where they have to collect sales tax and the other online retailers would not be collecting sales tax putting Amazon at a disadvantage. To even the playing field, Amazon is now not fighting _against_ online sales taxes but is now fighting _for_ online sales taxes.

Personally, I'm against online sales taxes. When you buy something online, you are already paying a "tax" of sorts and that is your _time_. That is a tax or cost to online purchases as it takes up to five days for your products to arrive. If you want your products that same day, you pay an extra (and real) tax by buying local.

What the politicians forget is that the online sales is a wash. If I don't pay sales taxes by buying from something from _their_ state, someone else is not paying sales taxes by buying from _my_ state. Meanwhile, in _both_ states, it creates increased sales and hence jobs which are filled by people who pay sales taxes, income taxes, property taxes, gas taxes, excise taxes (over half of what you pay for insurance is excise taxes btw), etc. etc. etc. It is to the states long term advantage to not charge sales taxes and create jobs. The online sales taxes is a short term solution where states will fill their coffers quickly but, it will reduce the number of jobs and hence taxpayers in the long term.

So, when online sales taxes get put in place and you are paying an extra 6-8% for your online orders, just remember to thank Amazon

Wrong focus

[Anonymous Coward]

The problem isn't that "state taxes are too big for Amazon to figure out." They've got plenty of legal and tax representation.

The real issue is for SMALL sellers on the internet. Say, people who sell via etsy, or bands that sell albums direct to fans.

Now, suddenly, THOSE people need to understand and properly understand taxes for all 50 states, collect those taxes, and remit them to the proper time to the proper authorities. Oh, with all the necessary paperwork.

Re:Amazon are crazy

[Xphile101361]

So at the end of the year you don't pay a use tax? Hopefully your state doesn't have one. Otherwise congratulations, You've just become a tax evader!